This week, however, I came across a collaborative innovation initiative involving manufacturers and universities in Virginia that could stand as a model for others.

Called the Commonwealth Center for Advanced Manufacturing (CCAM), the initiative is bringing together engineers and researchers from three universities and six manufacturers of aerospace and other products, all of which are contributing dollars and intellectual capital to pioneer innovative solutions to manufacturing problems. CCAM is being funded, by participants and state and federal governments, to the tune of $100 million over the next five years.

This week, the center broke ground on a 50,000-square-foot building on 20 acres in Virginia’s Prince George County. Construction will be completed and research will start within a year.

Initially, CCAM will focus its research efforts in two areas: the engineering of materials that can deliver predictable, functional surface properties; and new approaches to manufacturing systems, particularly the integration of design specifications and production.

The ambition behind CCAM is nothing short of providing companies with breakthrough manufacturing process innovations that will help them win in increasingly competitive global markets.

“If all we do is outsource to places where labor is cheap, that is a temporary solution to a problem,” says David Lohr, CCAM’s newly appointed president and executive director. “The way you build companies and profits is by innovating in the manufacturing processes themselves.”

The idea behind CCAM began to germinate three years ago after one of the initiative’s founding industrial participants, Rolls-Royce, announced it was investing in a new jet engine manufacturing plant in Prince George County. The 180,000-square-foot plant, now being developed, reportedly will employ up to 500 and represents a $170 million investment.

Rolls-Royce made state investment in CCAM a condition of the larger manufacturing investment, Lohr says. The company has set up similar centers at several other sites in the United Kingdom and one in Singapore.

Eventually, organizers pulled the University of Virginia, Virginia Tech, and Virginia State University into the collaboration, along with six industrial sponsors. Besides Rolls-Royce, they include Newport News Shipbuilding, Chromalloy, Canon Virgina Inc., and Siemens.

CCAM will combine private, directed research with research intended to benefit all participants in the program. The initiative, set up as a 501(c)(3) non-profit organization, calls for half of the funds put up by participants to go to research specified by the participants. The directing participant will own the intellectual property.

The other half of the funds will go toward collective research projects. All participants will share rights to it, and CCAM, not the universities involved, will own the IP. CCAM expects, in some cases, to license IP to outside interests.

Manufacturers—particularly small and midsize ones—are caught in a trap today when it comes to investing in the innovations they need to remain competitive. On the one hand, even as we emerge from the recession, capital is at a premium, and manufacturers are hard-pressed to justify investments in basic research and development such as surface engineering and new manufacturing processes and systems. On the other hand, global competition and rising customer expectations are, more than ever, placing a premium on just those kinds of innovations.

Collaborative initiatives such as CCAM could help solve both sides of that very difficult equation